Root (NASDAQ:ROOT – Get Rating) and First Acceptance (OTCMKTS:FACO – Get Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Root and First Acceptance, as provided by MarketBeat.

Root presently has a consensus target price of $16.34, suggesting a potential upside of 124.14%. Given Root’s higher probable upside, analysts clearly believe Root is more favorable than First Acceptance.

Risk and Volatility

Root has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, First Acceptance has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500.

Valuation & Earnings

This table compares Root and First Acceptance’s top-line revenue, earnings per share (EPS) and valuation.

First Acceptance has lower revenue, but higher earnings than Root. First Acceptance is trading at a lower price-to-earnings ratio than Root, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Root and First Acceptance’s net margins, return on equity and return on assets.

Institutional & Insider Ownership

0.1% of First Acceptance shares are held by institutional investors. 27.6% of Root shares are held by company insiders. Comparatively, 9.5% of First Acceptance shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Root beats First Acceptance on 7 of the 13 factors compared between the two stocks.

About Root

(Get Rating)

Root, Inc. provides insurance products and services in the United States. The company offers automobile, homeowners, and renters insurance products. The company operates a direct-to-consumer model and serves customers primarily through mobile applications, as well as through its website. Its direct distribution channels also cover digital, media, and referral channels, as well as distribution partners and agencies. The company was incorporated in 2015 and is headquartered in Columbus, Ohio.

About First Acceptance

(Get Rating)

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.

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